JISHOU, HUNAN — While exploring ways to move my money more easily around, I stumbled across Abra, a mobile phone app that transfers funds using the Bitcoin network. I gave it a try, and I like it. For one thing, it simplifies my transfers from China to the USA.
Before Abra, there were several steps to transfer money from my bank in China to my bank in the USA, whether I used PayPal or Bitcoin. Abra reduces that number, and removes some fees in the process.
There still remains one major drawback: Abra has no working relationships with banks in China. So, I still need to jump through a few hoops to buy Bitcoin to drop into my Abra wallet, but once it is there, it’s a breeze to send it to my bank account in the States.
I’ve done all sorts of stories about moving money across borders, but to review, here are the main steps.
- Log into my China PayPal account. Send funds from my Chinese bank to my American PayPal account. PayPal charges a 4% foreign exchange fee.
- Log into my American PayPal account. Transfer funds to my bank account.
Not bad, right? Unless you want to save 4% of your deposit for yourself.
- Buy Bitcoin using Chinese yuan. Formerly, I used one of the Chinese Bitcoin exchanges, but Bitcoin withdrawals have been halted since January. So, I have to use a peer-to-peer service like BitKan or localbitcoins.com. No matter which I use, it entails logging in to one service and then logging into online banking in some way.
- Transfer the Bitcoin to Coinbase. The Bitcoin network levies a fee of 0.0001 to 0.0005 BTC, which at today’s market prices correspond to between 12 and 50 cents a transaction.
- Log into Coinbase. Sell the Bitcoin and deposit the proceeds into my bank account. Coinbase charges a 1.5% fee for the transfer.
So, less costly than PayPal, but more of a hassle.
Abra, meanwhile, deposits funds directly into your bank account. Though it uses Bitcoin as the transfer medium, I don’t have to visit Coinbase to sell the Bitcoin. Plus, there are no fees!
I’ve used it twice so far, just to see how it works. I have an Android phone, so getting the app was not especially easy. China blocks all Google services, including the Play store. So, I had to find the app online elsewhere and sideload it to my phone.
- I bought some Bitcoin and deposited it into my Abra wallet. Abra does the Bitcoin-to-dollar conversion internally.
- Tap the Withdraw button in the app. Choose Transfer to Bank, then the bank account, and finally the amount to send. Tap Next and confirm the transfer. Again, Abra does the conversion internally.
With any of these methods, there is still a one- to two-day delay before the funds land in your bank account. I reckon it has to do with the ACH system for checking accounts.
Right now, Abra only has working relationships with banks in the Philippines and the USA. Everyone else must either deposit money using Bitcoin or by finding an Abra Teller, a person who takes your cash and deposits it on your behalf into the Abra network. It’s the same concept as Localbitcoins.com, but gussied up a bit.
As there are no Abra Tellers near me, I had to go the Bitcoin route.
But there’s an app for that, too!
Here in China, BitKan offers an app to link buyers and sellers of Bitcoin. Money transfers take advantage of another app, such as WeChat Wallet or Alipay, which pull funds from your linked (Chinese) bank account.
In other words, I don’t need to use a computer to buy Bitcoin and send it to my American bank. I can do everything on my phone, even if I am outside China. (Of course, I’d still need WiFi.)
This is the direction financial technology has been taking recently. As smartphones have become more common, if not de rigueur, fintech apps have multiplied like rabbits. So far, the biggest problem shared by all of them is balkanization. WeChat Wallet and Alipay work only in China, for example. Other apps, like Apple Pay and Android Wallet, have limited functionality in China, because you cannot link a Chinese bank account to them.
But the Bitcoin and the other cryptocurrencies, like Dash and Litecoin, surmount territorial boundaries (assuming you can get them with local currency). Abra piggybacks on that existing network with a slick and easy-to-use interface.
In short, 10/10. Would use again.
Honest, Abra did not pay me to write this post. Maybe they should. But in the meantime, you can leave a tip with PayPal or Bitcoin by using the pretty pictures below. Or, if you use Abra yourself, by sending funds to +8615080897460.
Also published on Medium.